The Adwords Auction

Every time an AdWords ad appears, it goes through what we call the ad auction, a process that decides which ads will appear and in which order. It’s not like an art auction where the highest bidder always wins; instead, AdWords does something a little more interesting:

1. The search

2. Ads are whittled down

3. Ads whittled even more

From that set of matching ads, the system ignores any that aren’t eligible, like ads that target a different country or are disapproved.

4. Ads are ordered

The remaining ads are shown, ordered on the page based on a formula we call Ad Rank, a combination of bid amount, the quality of your ads and landing page, and the expected impact of extensions and other ad formats. Keep in mind that a minimum Ad Rank is required for ads to show, so it’s possible for no ads to appear.

Action steps

5. Ads appear!

Jose sees relevant ads appear and orders the pizza of his dreams.

6. Repeat the process

Every time someone hankers for a pizza and does a search, the whole auction process starts again with potentially different results each time, depending on the competition at that moment.

Why it matters

The most important thing to remember is that the auction process uses quality, bids, and the expected impact of extensions and other ad formats to determine your ad’s position. So even if your competition bids higher than you, you can still win a higher position — at a lower price — with high-quality ads, landing pages, and extensions.

Also remember that the auction process repeats for every search on Google, each time with potentially different results depending on the competition at that moment and which ad you use. So don’t worry if your position on the page fluctuates — it’s normal for it to vary each time.

How you’ll see it

In step 4 shown above, ads are ordered on the page (that’s your ad position) using a formula called Ad Rank. The main components of Ad Rank are your bids, the quality of your ads, and website, as well as the expected impact of extensions and other ad formats. If you want to try to boost your position, you’ll need to beat your competitors with quality, bid amounts, or a mixture of both.

About Main Street Properties

Audie Street and Holly Lovett are not only the owners of Main Street Properties, but the foundation as well. Both owners actively participate in the day to day operations of Main Street Properties. Together, they provide guidance in life & business, teach classes, and hold one-on-one and small group coaching & mastermind appointments with agents throughout the week. If you are interested in working for a brokerage with brokers that care, call us today!